Carbon sequestration potential of agroforestry practices in the L

58 Pages·2008·1.3 MB·English

Carbon sequestration potential of
agroforestry practices in the
L’Ormière River watershed in Quebec

Prepared for

The Greenhouse Gas Mitigation Program for Canadian Agriculture

Agriculture and Agri-Food Canada

November 2008
Carbon sequestration potential of agroforestry practices
in the L’Ormière River watershed in Quebec

Authors
Maribel Hernandez – ÉcoRessources Consultants
Philippe Charland – Econova
Jean Nolet – ÉcoRessources Consultants
Michel Arès – Econova

Contributors and reviewers
Camille Caron – Ministère de l’Agriculture, des Pêcheries et de l’Alimentation du Québec
Michel Lambert – AGIR Maskinongé, Ville St-Gabriel, Quebec
Gilles Gagné – Institut de recherche et de développement en agroenvironnement, Quebec
François Gagnon – Syndicat de base de l’UPA de Grand Pré, St-Léon-le-Grand, Quebec
Stéphane Gariépy – Agriculture and Agri-Food Canada
René Audet – Agriculture and Agri-Food Canada
John Kort – Agriculture and Agri-Food Canada
Allen Eagle – Agriculture and Agri-Food Canada

This report has received funding under the Greenhouse Gas Mitigation Program for Canadian Agriculture. Any policy
views, whether explicitly stated, inferred or interpreted from the contents of this publication, do not necessarily reflect
the views of Agriculture and Agri-Food Canada.

For more information:
Michel Arès Jean Nolet Stéphane Gariépy
ECONOVA ÉcoRessources Consultants Agriculture et Agroalimentaire Canada
Telephone: [phone] Telephone: [phone] Telephone: [phone]
E-mail: [email protected] E-mail: [email protected] E-mail: [email protected]

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© Her Majesty the Queen in Right of Canada (2008)

Carbon sequestration potential of agroforestry practices in the
L’Ormière River watershed in Quebec (PDF)
Cat. No. A-98-4/3-2007E-PDF
ISBN 978-0-662-47230-8
AAFC No. 10398E

Aussi offert en français sous le titre : Potentiel de séquestration du carbone par des
pratiques agroforestières dans le bassin versant de la rivière L’Ormière au Québec.
ii
Abstract

The purpose of this study was to assess the economic and technical feasibility of implementing
agroforestry practices on farmland for the purpose of Carbon sequestration. This exercise was carried out
within the geographic context of an agricultural watershed, specifically the L’Ormière River watershed in
Quebec. The specific objectives were to determine the potential for establishing windbreaks and riparian
forest buffers within the watershed, to quantify the associated level of carbon sequestration and to
determine whether the financial benefits generated by the resulting emission reduction credits would be
sufficient incentive for the adoption of such agroforestry practices.
A spatial analysis of the L’Ormière River watershed suggested that riparian forest buffers could be
established on an area of 144 ha (equivalent to 20 m wide X 2 sides X 36 km) and windbreaks on an area
of 47.5 ha (equivalent to 9 m X 53 km). The total area available for these plantings, 191.5 ha, represents a
34% increase in the wooded area within the L’Ormière River watershed, itself an area of 3,000 ha (30
km2). Over a period of 25 years, one hectare of land devoted to riparian forest buffers would be able to
sequester 587 tonnes of CO equivalent (12 odt biomass/ha-year), whereas the sequestration potential of
2
one hectare of land planted to windbreaks would be 782 tonnes of CO equivalent. At the watershed scale,
2
over a 25-year-period, the total Carbon sequestration potential has been established at more than
120 thousand tonnes of CO equivalent, which, at $5 per tonne CO , works out to potential revenue of
2 2
approximately 600 thousand dollars from the sale of Carbon emission reduction credits.
The main goal of the study was to assess whether Carbon sequestration would provide sufficient incentive
for agricultural producers to adopt agroforestry practices on their farms. Under current market conditions
and based on the assumptions made in this study, it appears that sequestration potential does not provide
sufficient incentive. This is because the annual revenue from the sale of Carbon emission reduction credits
would be only about $435 per farm for the riparian forest buffer scenario and $235 per farm for the
windbreak scenario. These modest earnings are unlikely to influence producers’ decisions on whether to
adopt the agroforestry practices studied.
Based on the typical farm analyzed for two types of farms, assuming 10 dairy farms and 11 grain farms in
the watershed, and the 25-year horizon used, it was found that the riparian forest buffer systems would
result in a loss of income of $59,200 for individual producers, if they receive government financial
assistance, a cost-share of 70% for the purchase and establishment of the trees, or a loss of $87,600
without such assistance. Although the economics of these riparian buffers could be improved in various
ways, the supplemental income from the sale of emission reduction credits would not help to make the
systems profitable. By contrast, it was found that, over the same 25-year period, windbreaks would
Carbon sequestration potential of agroforestry practices in the L’Ormière River watershed in Quebec iii
generate supplemental income of $35,700 for individual producers with government financial assistance,
or $22,000 without.
The findings show that the level of CO sequestration associated with riparian forest buffers and
2
windbreaks is too low to warrant the adoption of such practices. Carbon sequestration in itself is not a
sufficient incentive for producers to establish windbreaks or riparian forest buffers. Based on the
assumptions applied in the study, the sale of carbon credits is not an economic argument that carries
weight in terms of the adoption of agroforestry practices. Instead, because of their multi-functionality,
their adoption will rest on a combination of economic and environmental considerations.
The cost-benefit ratios were found to vary widely for the two agroforestry practices. For example, the
establishment of riparian forest buffers appears to result in a net loss for agricultural producers, whereas
the planting of windbreaks generates significant gains for producers because of the associated increase in
crop productivity.
It follows that Carbon sequestration potential is not the sole attraction of agroforestry. The promise of
agroforestry practices relates more to other ecological goods and services which were not taken into
account in this study, but which can include reductions in non-point source pollution, erosion control, the
opportunity to increase or maintain biodiversity and landscape enhancement. The only agroforestry
benefits that were examined in the study were increases in agricultural yields (for windbreaks) and fibre
production.
Nevertheless, agricultural producers can contribute to carbon sequestration through a variety of practices
on their farms. Even if a given agroforestry practice does not generate enough carbon credits to justify
participation in the emissions trading market, a broader set of such practices might generate a volume of
credits that translates into significant supplementary income for producers. Research into a broader range
of agroforestry practices would provide the opportunity to examine this possibility in greater depth. The
fact remains that, on an individual basis, agricultural producers cannot generate enough Carbon emission
reduction credits to participate in the emissions trading market because their transaction costs are too high
in relation to the revenue that can be earned from the sale of carbon credits. Therefore, consideration
should be given to cooperative approaches that would make it possible to aggregate producers’ Carbon
emission reduction credits and reapportion the proceeds of the sale of those credits among the participants.
Carbon sequestration potential of agroforestry practices in the L’Ormière River watershed in Quebec iv
Table of contents

INTRODUCTION............................................................................................................................................1
1. Measures for promoting agroforestry practices that support Carbon sequestration..........3
1.1. Kyoto Protocol..........................................................................................................................3
1.2. Examples of programs in other countries.................................................................................4
1.3. Canadian programs..................................................................................................................4
1.4. Main findings............................................................................................................................6
2. Implementation of agroforestry practices for Carbon sequestration in the L’Ormière
River watershed.......................................................................................................................................8
2.1. Selection of representative sites and agroforestry practices...................................................8
2.1.1. Establishment of riparian forest buffers for Carbon sequestration on a typical dairy farm
in the upstream part of the watershed................................................................................................10
2.1.2. Establishment of windbreaks for Carbon sequestration on a typical grain farm in the
downstream part of the watershed......................................................................................................12
3. Technical and environmental potential of agroforestry in the L’Ormière River watershed
14
3.1. Methodology used for the spatial analysis..............................................................................15
3.2. Potential area of riparian forest buffers and windbreaks in the L’Ormière River watershed23
4. Economic evaluation of agroforestry practices that support Carbon sequestration.........25
4.1. Planting of riparian forest buffers..........................................................................................26
4.1.1. Loss of income from the reduction in area under cultivation............................................26
4.1.2. Costs associated with planting and tending riparian forest buffers..................................29
4.1.3. Income from the sale of wood............................................................................................29
4.1.4. Financial assistance from government programs.............................................................30
4.2. Planting of windbreak systems................................................................................................32
4.2.1. Losses or gains associated with the reduction in crop area and increased productivity..32
4.2.2. Costs associated with establishing and tending windbreaks.............................................35
4.3. Summary of the economic analysis.........................................................................................38
5. Economic evaluation of Carbon sequestration through agroforestry practices................41
5.1. Estimation of Carbon sequestration through agroforestry practices.....................................41
5.2. Participation in an offset system and value of sequestration credits from agroforestry
practices.............................................................................................................................................42
5.3. Economic evaluation of Carbon sequestration potential at the watershed scale...................44
6. Conclusion................................................................................................................................46
BIBLIOGRAPHY...........................................................................................................................................48
APPENDIX...................................................................................................................................................51
PERSONS CONSULTED................................................................................................................................51

Carbon sequestration potential of agroforestry practices in the L’Ormière River watershed in Quebec v
List of tables

Table 1. Representative farms and proposed agroforestry practices...........................................................10
Table 2. Value of non-permanent carbon credits relative to permanent credits..........................................12
Table 3. pH classes based on IRDA’s soil classification............................................................................20
Table 4. Texture classes based on IRDA’s soil classification.....................................................................20
Table 5. Texture classes based on IRDA’s soil classification.....................................................................21
Table 6. Loss of income associated with the area removed from production to establish a 20-metre-wide
riparian forest buffer in the downstream part of the watershed...................................................................28
Table 7. Costs of planting and tending a 20-metre-wide riparian forest buffer..........................................29
Table 8. Income from the sale of wood from the riparian forest buffer......................................................30
Table 9. Scenario 1: establishment of a riparian forest buffer on the representative dairy farm.................31
Table 10. Annual change in income associated with the area removed from production to establish
windbreaks..................................................................................................................................................33
Table 11. Area protected by windbreaks and additional annual income.....................................................34
Table 12. Discounted income resulting from the increase in productivity associated with windbreaks.....34
Table 13. Costs of planting and maintaining a windbreak..........................................................................35
Table 14. Discounted net income from the sale of wood from windbreaks................................................36
Table 15. Scenario 2: Planting of windbreaks on the representative crop farm..........................................37
Table 16. Gains or losses from the implementation of agroforestry practices contributing to Carbon
sequestration on individual farms................................................................................................................38

List of figures

Figure 1. The L’Ormière river watershed, Landsat 7TM Image (band pairs 7-3-4)...................................14
Figure 2. Map of prevailing winds..............................................................................................................15
Figure 3. Planting constraints......................................................................................................................16
Figure 4. Generalization of streams to create riparian forest buffer systems..............................................18
Figure 6. Map of ALI for hybrid poplar and red ash...................................................................................22
Figure 7. Diagram for calculating the potential area of riparian forest buffers and windbreaks.................23
Figure 8. Vegetation before and after the analysis of planting potential.....................................................24
Carbon sequestration potential of agroforestry practices in the L’Ormière River watershed in Quebec vi
Introduction
The Kyoto Protocol of 1997 marked a turning point in efforts to tackle climate change at the international
level. Under this protocol, a number of countries, including Canada, made a commitment to limit their
greenhouse gas (GHG) emissions or to reduce them by a certain percentage relative to the 1990 level
during the 2008–2012 period. Canada pledged to reduce its GHG emissions by 6% from the 1990 level,
which translates into a real reduction of 30%, or 260 million tonnes of CO , from the 2005 level, taking
2
into account changes in economic activities.
Furthermore, in order to attain their national reduction targets under Kyoto, various countries, including
Canada, can implement certain mechanisms set out in the Kyoto Protocol, including emissions trading
systems. In concrete terms, this involves imposing a cap on the emissions of large industrial emitters and
creating an offset system that allows emission reduction credits to be exchanged within a given economic
sector or between one sector and another sector in which emissions are below the cap.
The agriculture sector or the forestry sector, for instance, might find it advantageous to develop Carbon
sequestration projects and sell the resulting emission reduction credits to large industrial emitters. Emitters
would be willing to purchase credits from these sectors when the price of those credits is lower than the
cost of implementing the requisite measures to reduce their own emissions.
In view of this possibility, it is conceivable that individual agricultural producers would be interested in
implementing agricultural practices, particularly agroforestry practices, that can help to remove
greenhouse gases from the atmosphere. The Carbon reduction credits earned from such practices could be
sold to large emitters that have reached their allowable emission limits.
The Canadian government set up the Greenhouse Gas Mitigation Program for Canadian Agriculture
(GHGMP) with the aim of beginning the process of reducing GHG emissions (and enhancing carbon
sequestration) from agriculture through soil, nutrient and livestock management measures. The program
was a starting point for attaining the objective of reducing GHG emissions from agriculture—5.8 million
tonnes of CO equivalent per year1—during the Kyoto commitment period from 2008 to 2012. It had
2
several thrusts: identifying best management practices that reduce GHG emissions; increasing public
awareness; and encouraging producers to adopt suitable soil, nutrient and livestock management practices.

1 This value represents the estimated sector potential; range could be anywhere from 3 to 10 Mt depending on
practice adoption
Carbon sequestration potential of agroforestry practices in the L’Ormière River watershed in Quebec 1
Under the program, studies were undertaken to assess the effect of given practices in relation to GHG
mitigation and the results were harnessed to enhance existing practices.
The present study was undertaken to assess the economic, technical and environmental feasibility of
implementing agroforestry practices with a view to Carbon sequestration. Specifically, the objective was
to determine whether the financial benefits generated by the resulting emission reduction credits would
provide sufficient incentive for agricultural producers to adopt such agroforestry practices. The analysis
was carried out in the geographic context of the L’Ormière River watershed, which is located within the
Maskinongé River watershed. The study also provides an estimate of the Carbon sequestration potential at
the watershed scale and the associated economic impacts.
The study stared through a review of existing incentives for the adoption of agroforestry practices that
contribute to Carbon sequestration. These agroforestry practices are described, and the technical and
environmental potential associated with those practices was assessed in relation to the L’Ormière River
watershed. This information was used to calculate the Carbon sequestration potential at the watershed
level which fed into a cost-benefit analysis for the adoption of the selected agroforestry practices. This
analysis was completed by an economic evaluation of the Carbon sequestration potential of those practices
at the watershed level.
Carbon sequestration potential of agroforestry practices in the L’Ormière River watershed in Quebec 2
1. Measures for promoting agroforestry practices that support Carbon
sequestration
Canada and other countries can implement a variety of direct or indirect measures to encourage the
adoption of agroforestry practices that sequester or remove GHGs from the atmosphere.
1.1. Kyoto Protocol
The Kyoto Protocol of 1997 sets out a time frame for the reduction of anthropogenic GHG emissions,
considered to be the main cause of global warming. In ratifying the Protocol, 39 industrialized countries,
including Canada, made a commitment to reduce their CO emissions by an average of 5.2% annually
2
relative to the 1990 baseline during the 2008–2012 commitment period.
The Kyoto Protocol also presents several mechanisms intended to assist participating countries achieve
their reduction targets. For example, under an Emissions Trading System, industrialized countries that
ratified the Kyoto Protocol and pledged to reduce their GHG emissions can purchase emission reduction
credits from other countries that have not yet reached their emissions quota. Another Kyoto mechanism,
Joint Implementation, allows these countries to trade the credits they earn from carrying out emission
reduction projects. Finally, under the Clean Development Mechanism, industrialized countries can earn
reduction credits by carrying out GHG emission reduction projects in developing countries.
In addition, every country that has an emission cap can try to meet its reduction target by implementing
various measures such as a system of tradable offset carbon credits. This approach involves setting
emission limits for major industrial emitters and allowing GHG emission reduction credits to be traded
within a given sector. An offset system could also be put in place for the benefit of sectors whose
emissions are below the allowable limit.
Once an offset system is in place, agricultural producers could implement Carbon sequestration projects
and sell their reduction credits to large industrial emitters. Emitters would be willing to buy credits from
the agriculture sector when the price of those credits is lower than the cost of implementing measures to
reduce their own emissions.
Canada has explored the possibility of setting up an offset cabon credit trading system but it has not yet
done so. The European Union already has an operational emissions trading scheme; some U.S. states have
Carbon sequestration potential of agroforestry practices in the L’Ormière River watershed in Quebec 3
also set up systems of this type (Chicago, Illinois and California), but these U.S. carbon markets are
operating outside the Kyoto Protocol.2
Finally, other possible approaches include taxation measures, greenhouse gas emission standards and
awareness projects supporting voluntary efforts to cut GHG emissions.
1.2. Examples of programs in other countries
In the United States, the Environmental Quality Incentives Program (EQIP) provides producers in certain
watersheds with financial assistance for adopting environmentally beneficial agricultural practices. The
assistance covers 75% of eligible costs and up to 90% for beginning producers, with payments limited to
an total of $450,000 per farm during the period of the program. These financial incentives are intended to
encourage producers to implement conservation practices that they would not otherwise adopt. The
program objectives include reducing greenhouse gas emissions, particularly N O. Another initiative, the
2
Agricultural Management Assistance (AMA), was designed to help producers who voluntarily adopt
management methods to achieve various goals such as sequestering or removing GHGs (e.g., through the
establishment of windbreaks). The maximum amount of assistance provided is $50,000 per fiscal year.
In France, individual agricultural producers can enter into sustainable agriculture contracts (Contrats
d’Agriculture Durable, CAD) with the government that entail a voluntary five-year commitment to
implement environmentally beneficial agricultural practices in return for financial compensation.
Although this is a national program, the measures to be implemented are defined on a regional basis. They
include certain agroforestry practices that contribute to Carbon sequestration, such as the establishment of
windbreaks or riparian forest buffers. An average of 27,000 euros is awarded over the term of each
contract.
In Europe, the Luxembourg Agreement, signed by the Agriculture Ministers of the European Union in
June 2003, integrates the principle of cross-compliance into the Common Agricultural Policy (CAP),
which governs the EU single farm payments made to producers for implementing nationally defined
environmentally beneficial practices, some of which help to mitigate GHG emissions.
1.3. Canadian programs
In Canada, the federal government’s Agricultural Policy Framework (APF) has a strong environmental
focus and seeks to promote environmentally sustainable agriculture. Quebec’s Prime-Vert program is

2 The United States did not ratify the Kyoto Protocol.
Carbon sequestration potential of agroforestry practices in the L’Ormière River watershed in Quebec 4